Judge sets new timeline for closing temporary medical pot shops

The Medical Marihuana Licensing Board has conducted its last meeting. The monthly meetings likely will be replaced with a rolling application process within the Marijuana Regulatory Agency established through Gov. Gretchen Whitmer's March executive order.(Photo: Carlos Osorio / AP, file)

Lansing — Michigan Court of Claims Judge Stephen Borrello has stopped the state yet again from enforcing a deadline for temporary medical pot facilities to get licensed or risk their licensing status.

In a series of orders Tuesday, Borrello issued injunctions against the state’s March 31 deadline. He ruled that the state could not revoke those facilities’ “provisional licenses” until it had ruled on their applications or waited 60 days after a denial to allow time for appeal.

The injunction applied in cases where Borrello had denied the state’s request for dismissal and in cases where he had granted it because complaints weren’t signed and verified.

The judge also dismissed complaints from licensed medical pot facilities that opposed temporary state rules that allowed untested marijuana into the medical marijuana market.

The Marijuana Regulatory Agency, which took over Tuesday from the Bureau of Marijuana Regulation, said it had received the court orders but declined comment until “after we have a chance to thoroughly review them.”

The Michigan Cannabis Industry Association has stopped short of taking sides on the issue since the association represents licensed and unlicensed facilities alike. However, on Tuesday, the group urged the state to focus on licensing more growers and processors so it can transition more quickly to a fully licensed market.

"These court cases are part of the growing pains that happen when starting an industry from scratch," said Josh Hovey, a spokesman for the association.

Borrello's decisions come after several attempts by the state to end a grace period in which temporary medical pot facilities could continue operating without licensing sanctions while they proceeded through the application process. The end date of that grace period was extended several times both by the state and Borrello, who most recently stopped the state from enforcing a March 31 deadline.

“The expiration of the deadline would have forced entities which had yet to receive rulings on their applications, as well as any appealing entities, to immediately cease operations, or face possible criminal and civil forfeiture actions,” Borrello said in his Tuesday ruling.

It is not immediately clear how many facilities were spared closure because of Borrello’s decision. As of the March 31 deadline, roughly 50 facilities faced potential shutdown, but the state has processed some applications and appeals in the month since.

In his decision, Borrello said the state essentially granted “provisional licenses” with its grace period for temporary operators only to later violate their due process rights by enforcing “arbitrary and capricious” deadlines.

“The shutdown date has been ever-changing, with the only constant being that the shutdown date moves without regard for whether all of the applications have received a substantive and final decision on the merits,” Borrello wrote. “These bait-and-switch announcements effectuated by LARA were entirely arbitrary and capricious.”

The Senate could consider a bill this week that would suspend an unlicensed facility's application process for a year if it continued to operate past June 1. The bill, approved earlier this month by the House, includes amendments that appear to exempt the temporary facilities at issue in Borrello's orders.